Indian Bank Terminates Accounts With Crypto-Related Transactions

Kotak Mahindra Bank, the second largest private bank (by market cap) in India – has turned hostile towards users who deal in cryptocurrency related transactions. This news comes via a Twitter user who pointed out a clause in the bank’s terms and conditions for account holders, where the bank insists that users who hold an account with them should not make cryptocurrency related transactions. The terms and conditions read:

“Basis [sic] the regulations issued by RBI, I hereby declare that I will not deal with any transactions related to cryptocurrency including bitcoins. I also understand and agree that the bank reserves all right to close my account without further intimation in case I am found to undertake such transactions.”

This was spotted by an Indian Twitter user Indian CryptoGirl, who tweets under @DesiCryptoHodlr. She said:

Indian Banks now forcefully taking permission from us to ‘reserve right to close our account without further intimation’ if we deal in #cryptocurrency transactions Ability to decide what to do with our own money is the very reason we need to invest, #BUIDL, & believe in #bitcoin

She also tweeted the letter that the bank sent to her, stating that her account was reviewed and it was found that she had “undertaken online transaction/s involving dealings in Bitcoin or a virtual currency.” The bank said that the account holder will now have to visit one of their branches to close the account herself, or the account would be closed in the next thirty days.

The bank states the reason for this policy being the circular issued by the Reserve Bank of India (RBI) in April 2018. The circular had stated that regulated financial institutions across the country can terminate their partnership with their users if they are found to be dealing in cryptocurrency related transactions. A case is currently being heard in the Supreme Court of India regarding this action of the RBI, which Indian cryptocurrency exchanges have claimed to be violating the constitution of India.

However, by closing the accounts of users dealing in cryptocurrencies, Kotak Mahindra Bank is simply following the orders issued by the Reserve Bank of India, which is the apex banking authority in the country.

The Twitter user who shared the letter also pointed out that it is not just India, but banks are turning hostile towards cryptocurrencies in Pakistan as well. Cryptocurrencies were banned in Pakistan in 2018 – and an image shared by the Indian CryptoGirl shows a message from Faysal Bank in Pakistan sending anti-crypto messages to their users.

Interestingly, the same Kotak Mahindra Bank which is taking these strict actions on users performing cryptocurrency related transactions – has also entered into a partnership with blockchain platform Ripple since June 2018 to accelerate cross-border remittances. Indian banks have begun taking an interest in blockchain technologies. Earlier in 2018, India’s ICICI Bank had enlisted 250 corporates on their blockchain platform.

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